Stay On Track With Our 5 Step New Year Financial Checklist

Welcome to the new year! As a mortgage broker, we understand that planning for the future can be difficult, especially when it comes to finances. That’s why we put together this five-step financial checklist to help you stay on track and make the most of 2021. In this blog post, we’ll be discussing the importance of creating a budget, setting financial goals, understanding your credit score, and more. With the help of this checklist, you’ll be able to start the new year with a financial plan in place and make sure you’re on the right track. So, let’s get started!

Step One: Make a Budget

Step One: Make a Budget

As we move into the new year, it's important to set a budget for yourself and your family. This step is key to getting your finances on track and setting yourself up for a successful year.

When thinking about your budget, start by setting aside enough money to cover all your necessary expenses, like rent, groceries, utilities, and any other bills. You should also think about unexpected expenses that may come up during the year, such as medical bills or home repairs. Once you know how much you can afford each month, you can start planning how to use the rest of your funds.

When making your budget, consider how you spend your money. Think about whether you need to cut back on luxury items or if you can reallocate funds to other areas. For example, if you usually spend a lot on dining out, you may want to consider investing in more groceries and cooking at home instead.

It's also important to set aside money for savings and investments. This could include setting up an emergency fund, investing in your retirement, or setting aside money for a large purchase. This will help ensure that you are prepared for any unexpected expenses that may arise, and will help you reach larger financial goals.

Before you start budgeting, it's helpful to track your spending for a few weeks. This will give you a better idea of where your money goes and will help you create a budget that works for you.

By setting a budget and tracking your spending, you will be taking the first step towards a successful financial future.

Step Two: Review Your Debt

Step Two: Review Your Debt

With the new year upon us, it’s the perfect time to assess your debt situation and create a plan for paying it off. Make sure you have a clear understanding of how much debt you have, how much you’re paying in interest, and the term of the loan.

One of the first steps in tackling debt is to make sure you’re paying the minimum payments on all of your accounts. This is especially important for credit cards, which can have very high interest rates. If you’re able to pay more than the minimum, you’ll pay less in interest and be able to pay off your debt faster.

Once you’ve identified your debt, you can start to look at ways to pay it off. You might be able to consolidate some of your debt onto a lower interest loan, such as a personal loan or a home loan. It’s important to remember that while this can reduce your interest payments, it doesn’t reduce the amount of debt you owe.

You also might want to consider the Government’s Financial Assistance Package, which can help eligible Australians with financial assistance for paying off their debt. You can check if you’re eligible for this on the Australian Government’s website.

Finally, if you’re having trouble paying off your debt, it’s important to seek professional advice. A financial advisor or debt counsellor can help you come up with a plan to pay off your debt and set you up for success in the new year.

Step Three: Make a Savings Plan

Step Three: Make a Savings Plan

When it comes to your financial goals for the New Year, one of the most important steps is to make a plan for saving. Achieving your financial objectives takes discipline and careful planning, and the only way to do this is to have a savings plan in place.

Creating a savings plan involves setting clear financial goals and determining how to reach them. It’s important to be realistic about what you can achieve and what you can’t. Once you’ve established your goals, consider what steps you need to take to achieve them. You may need to adjust your budget, cut back on expenses, or make other lifestyle changes.

For some, a savings plan might involve setting up an automatic payment to a savings account each month. This helps to ensure that your savings goals are met each month, and you can adjust the amount as needed. You may also want to consider setting aside some money into a high-interest savings account to help your savings grow faster.

It’s also important to think about how you’ll use the money you save. Consider whether you’ll need the money for a large purchase, such as a down payment on a house or a car, or whether you’ll use it to build up an emergency fund. Having a clear idea of how you’ll use the money you save can help to motivate you to stick to your plan.

Creating a savings plan is a great way to stay on track with your financial goals this year. With careful planning and dedication to your plan, you can reach your financial objectives and have a healthier financial future.

Step Four: Reassess Your Insurance Coverage

Step Four: Reassess Your Insurance Coverage

At this time of year, it's important to take a look at your insurance coverage to make sure it's still meeting your needs. Depending on your circumstances, you may have different types of insurance, such as health insurance, car insurance, home and contents insurance, life insurance, disability insurance, and income protection insurance.

It's important to review your insurance coverage at least once a year to ensure it provides the right level of protection and is still appropriate for your needs. This is especially important if you’ve had any major changes in your life, such as getting married, having a baby, or buying a new house. It’s also important to check that you’re not paying for coverage you no longer need, such as if you’ve sold a car.

When it comes to health insurance, it's worth checking to see if you’re eligible for any government subsidies, as this could lower your premiums. It's also important to consider the type of health insurance plan that’s right for you. For example, if you’re young and healthy, a basic plan may be suitable, but if you have a chronic condition or are older, you may need a plan that offers more comprehensive coverage.

It’s also important to check your home and contents insurance. As a general guide, your home and contents insurance should cover the cost of rebuilding or replacing the items in your home no matter what the cause of damage. This includes theft, fire, storm damage, and more. You should also check the coverage limits and excess fees, as these can affect the amount of protection you receive.

When it comes to car insurance, it’s important to consider the type of cover you need. For example, do you need third party property damage cover, or comprehensive cover? It’s also important to check that you’re covered for any modifications you’ve made to your car, such as a towbar or bull bar.

Finally, when it comes to life insurance, it’s important to consider how much coverage you need, and the type of policy that’s right for you. If you’re married, you may want to consider joint life insurance policies, which typically offer lower premiums than two separate policies.

Overall, reassessing your insurance coverage is a great way

Step Five: Set Financial Goals for the New Year

Step Five: Set Financial Goals for the New Year

Now that you have set up your budget and created an emergency savings fund, it’s time to set up financial goals for the new year. Setting financial goals is a great way to stay on track with your budget and ensure you keep your finances in check.

When setting financial goals, it is important to be realistic and set achievable goals that you can work towards. Start by looking at your current financial situation and identifying areas that you would like to improve. Consider your long-term financial goals and break them down into smaller, more manageable goals.

For example, if you would like to buy a house within the next five years, set a goal of saving a certain amount of money each month. This will give you a clear target to work towards and allow you to focus on achieving your financial goals.

Another great goal to set is to reduce your debt. Make a plan to pay off any credit card debt or personal loans you have, and set a goal of reducing your interest payments. Think about setting up automated payments to make sure you always meet your payments on time.

Finally, consider setting up a savings plan to ensure that you are able to put away money for the future. This could include setting up a regular transfer from your bank account to a savings account each month, or setting up a tax-effective savings plan like a superannuation fund.

By setting financial goals for the new year, you can ensure that you are on track to achieving your long-term financial goals. While it may take some time and effort to set up these goals, the rewards will be worth it in the long run.

Got questions about your home loan? Let's talk

At Ello Lending, we are here to help you stay on track with your finances in 2020 and beyond. Our 5 Step New Year Financial Checklist is a great starting point to get organized and set realistic goals for the year ahead. We hope that this blog post has been helpful for you and your financial journey.

If you have any questions or would like to discuss any of the points mentioned, please don't hesitate to get in touch with our friendly team. We'd love to help you make the most out of your finances in 2020!